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RIYADH: A halt to Russian gas supplies to Germany would trigger a deep recession and cost half a million jobs, a senior economist said in an interview published on Tuesday, as Europe’s biggest economy tries to cut Russian energy imports.

Achim Truger, a member of Germany’s Council of Economic Experts, said German industry could suffer serious damage in the long term if Russian President Vladimir Putin decides to cut gas exports to Germany.

“By most calculations, an end to gas supplies from Russia would trigger a deep recession. Half a million jobs could be lost,” daily newspaper Rheinische Post quoted Truger as saying.

Last month, Russia’s Gazpromcut Poland and Bulgaria off from its gas for refusing to pay in roubles, and threatened to do the same to others, raising fears that it could take similar action against Germany.

Russian gas accounted for 55 percent of Germany’s imports last year, and Berlin has come under pressure to unwind a business relationship that critics says is helping to fund Russia’s war in Ukraine.

Truger also said it would take a long time for inflation in Germany to fall again.

“Excessive inflation will continue well into 2023,” he said.

German inflation hit its highest level in more than four decades in April, pushed higher by a spike in the price of natural gas and mineral oil products since Russia’s invasion of Ukraine. 

Japan’s household spending 

Japanese household spending fell 2.3 percent in March from a year earlier, government data showed on Tuesday, marking the first decline in three months.

It compared with economists’ median estimate of a 2.8 percent drop.

Romania boosts interest rate 

Romania’s central bank lifted its benchmark interest rate by a more than expected 75 basis points to 3.75 percent on Tuesday and warned inflation would remain in double digits until the second half of 2023.

The bank raised its lending facility rate to 4.75 percent from 4.00 percent and its deposit rate to 2.75 percent from 2.00 percent, and said it would retain firm control over market liquidity.

A majority of analysts polled by Reuters had expected a 50 basis points hike, while some saw a bigger one percentage point raise.

Australia retail volumes rise

Australian retail sales volumes topped forecasts in the March quarter even as prices for many goods rose sharply, pointing to resilient consumer demand and a solid start for the economy this year.

Data from the Australian Bureau of Statistics out on Tuesday showed retail sales in the first quarter rose an inflation-adjusted 1.2 percent from the previous quarter, beating market forecasts of a 1 percent gain.

Sales were up 4.9 percent on a year ago basis at a record A$93.19 billion ($64.51 billion) with cafes, restaurants and takeaway food services enjoying the largest rise as coronavirus restrictions eased.

Malaysia’s industrial production 

Malaysia’s industrial production in March rose 5.1 percent from a year earlier, above forecast, government data showed on Tuesday.

March’s industrial production was expected to rise 4.8 percent, according to 12 economists surveyed in a Reuters poll.

Italy industry output flat 

Italian industrial output held up much better than expected in March, posting a flat reading from the month before after a jump of 4 percent in February, data showed on Tuesday.

A Reuters survey of 16 analysts had pointed to a 1.9 percent drop in March.

On a work-day adjusted year-on-year basis, industrial output was up 3.0 percent, following a 3.4 percent annual rise the month before, national statistics bureau ISTAT reported.

However, in the first three months of the year, output was down 0.9 percent compared with the final quarter of 2021, ISTAT said.

March saw month-on-month rises for production of consumer goods, investment goods and energy items, while intermediate goods declined.

The eurozone’s third largest economy contracted by 0.2 percent in the first quarter, hit by COVID-19 restrictions at the start of the year followed by uncertainty and high raw material prices linked to the war in Ukraine.

Mario Draghi’s government last month cut its forecast for Italy’s gross domestic product growth this year to 3.1 percent from a 4.7 percent projection made in September.

With input from Reuters